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Books by Horace Campbell
Barack Obama and 21st Century Politics /
Pan-Africanism, Pan-Africanists, and
African Liberation in the 21st Century
Reclaiming Zimbabwe /
Rasta and Resistance: From Marcus Garvey to Walter
Rodney
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Chickens Are
Coming Home to Roost
US Credit Downgrade by Standard & Poor’s
By
Horace Campbell
11 August 2011
On Friday 5 August
2011, one of the world’s leading credit rating agencies,
Standard & Poor’s (S&P), downgraded the United States’
top-notch AAA rating for the first time ever in the
United States’ history. S&P cut the long-term US rating
down to AA+ with a negative outlook, citing concerns
about budget deficits and political gridlock. In
their statement justifying the downgrade S&P stated
that:
|
The downgrade reflects
our opinion that the fiscal consolidation
plan that Congress and the administration
recently agreed to falls short of what, in
our view, would be necessary to stabilize
the government's medium-term debt dynamics.
More broadly, the downgrade reflects our
view that the effectiveness, stability, and
predictability of American policymaking and
political institutions have weakened at a
time of ongoing fiscal and economic
challenges. |
Additionally,
Standard & Poor’s indicated that it might further lower
the US long-term credit rating to AA within the next two
years if the United States’ deficit reduction measures
were deemed inadequate. These are strong statements from
a private agency bent on disciplining the government of
the United States with the threat of a further
downgrade. What gives this agency such power? In
answering this question, we would seek to understand
what is a credit rating agency; the source of a credit
rating agency’s power; what is S&P’s track record and
what implications do its decisions have for the
international political system, especially for humanity.
In all major capitalist countries, the power of the
dominant faction is hidden behind ideology (free
market), law (protection of private property),
propaganda (corporate-controlled media), the coercive
organs of the state (military, police and prison) and
the power of finance capital (banks, insurance and
financial instruments). Credit rating agencies represent
the power of financial capitalists and are usually held
in the background to discipline corporations and
governments. In moments of crisis these agencies show
their hand.
These agencies along with the International Monetary
Fund (IMF) and the US military have been the weapons
against the true self-determination of humanity. United
States citizens are now beginning to pay attention to
the power that the IMF, credit rating agencies and the
military wielded over most countries in the world.
US Treasuries (or T-bills) are traditionally
considered to be a risk-free investment precisely
because in the country’s 200+ year history, its rating
has never been downgraded and the securities are backed
by the government.
The downgrade of the credit rating of the United States
by Standard & Poor’s is much more than a psychological
blow to the prestige of the imperial overlords in the
United States. This is a sign of a power shift and
another blow to the position of the US as the sole
superpower. The most oppressed must organise to break
the power of capital and the imperial overlords or
humanity will pay a high price.
What Is a Credit Rating Agency?
Credit rating agencies provide information on issuers of
securities whether the issuers are corporations or
countries. A credit rating agency informs investors
whether issuers of securities (such as debt obligations,
fixed income securities) can meet their obligations to
those securities. The top three credit rating agencies
with international influence are
Standard & Poor’s,
Fitch
Ratings, and
Moody’s
Investor Services. The job of these agencies is to
provide an analysis of the risk posed to investors by
bonds, companies and countries. The risk analysis
provided to investors by the credit rating agencies is
supposed to be objective. However, the credit rating
agencies are private entities owned by profit-making
companies performing what is essentially a regulatory
role. Thus, the credit rating agencies cannot truly
serve the investing public because they have a fiduciary
obligation to their shareholders to maximise profit.
The rating agencies achieved their influence over time
since the capitalist depression of the 1930s but have
become more important to the US economy in the era of
financialisation, commencing on 15 August 1971. It was
from this date that the US gave unlimited rights to the
currency speculators after it reneged on the
Articles of Agreement of the IMF that had placed the
convertibility of the dollar on par with US$35 for one
ounce of gold. This departure from the
gold standard, called the ‘Nixon
Shock’ after the president who authorised it now
backed the US dollar with the military might of the
United States. During the Cold War, international
capitalists were willing to shelter under the US
military umbrella and one price for this shelter was to
accept the political power of US credit rating agencies.
These private corporations were issued permits to be
credit rating agencies by the
United States Securities and Exchange Commission
through the Nationally Recognized Statistical Rating
Organization (NRSRO) therefore turning rating agencies
from solely private entities into regulating bodies.
In the past 20 years, the business of credit rating
followed the path of centralisation and concentration of
capital so that the rating business fell in the lap of
the three big firms, affording these organisations the
power to make life and death decisions about
corporations and countries.
The subjective nature of their ratings will be brought
out later but in the aftermath of the clear theft and
fraud of the capitalist organization called Enron,
the rating agencies in public hearings held by the SEC
in 2002 insisted that credit ratings were only
opinions and should have a limited role which is to
assess the creditworthiness of issuers on an ongoing
basis, and the ‘likelihood’ that debt will be repaid in
a timely manner. The fact that ratings are ‘opinions’ is
important in the US legal context in that these big
three capitalist corporations seek to be protected by
the First Amendment and from civil and criminal
liability.
From Where Do Credit Rating Agencies Get Their Power?
These credit rating agencies earn their power from the
fact that they are owned by the top financial
institutions on Wall Street. For example, S&P is owned
by
McGraw Hill Companies, one of the United States’ big
media and publishing conglomerates. The board of
directors is comprised of the top individuals of finance
capital with a few academics thrown in. The shareholders
of McGraw Hill are from the top financial houses. McGraw
Hill owns Aviation Week, which is one of the
prime advocates for a section of the US military. Though
S&P is a wholly owned subsidiary of McGraw Hill,
Moody's, on the other hand, is a publicly-traded
corporation. Its largest single shareholder, with 12 per
cent of the company's shares, is
Berkshire Hathaway, Warren Buffett's company.
Fitch
is more transnational with roots in French finance
capital.
Thus, we know that the shareholders of
McGraw Hill can ensure that their ratings are
sanctified by governmental authorities and most
importantly, by the
IMF. The power of these credit rating agencies has
accumulated over time and has been consolidated within
the context of the power of finance capital over the
international capitalist economy. By seizing a
regulatory role while eschewing clear liability, these
agencies gained the political power to be whatever they
wanted to be.
Since the Depression of the 1930s, statutes and rules
required that mutual fund and money managers of almost
every stripe buy only those bonds that have been given
high grades by a
Nationally Recognized Statistical Rating Organization.
The effect was to make the three certified rating
agencies an oligopoly. It was this power that these
agencies used against Asia by providing cover for US
companies to buy up assets cheaply in the aftermath of
the Asian financial crisis (1997-98). This power also
played a role in the recent intimidation of European
countries, including Greece, Portugal, Ireland, and
Iceland, to launch austerity measures against workers by
downgrading the ratings of these countries.
Power Struggles Within the International Capitalist
System
There are numerous commentaries on the downgrade of the
US but the one commentary that caught my attention was
that of
Paul Craig Roberts, former assistant secretary of
the
Treasury in the Reagan administration and associate
editor and columnist at the Wall Street Journal.
This is a civil libertarian who was arguing that there
is a struggle between the military and Wall Street for
power in the USA. In
an article published on counterpunch.com, after
quoting from the statements of Dwight Eisenhower on the
rise of the military industrial complex, Roberts opined
that from the time of
Dwight Eisenhower till today, the United States has
been dominated by the military security complex.
According to this analysis of the downgrade, the only
challenge to the military was Wall Street and Wall
Street was using this downgrade as its leverage to
fortify its challenge:
‘The main power rival was Wall Street, which controls
finance and money and is skilled at advancing its
interests through economic policy arguments. With the
financial deregulation that began during the Clinton
presidency, Wall Street became all powerful. Wall Street
controls the
Treasury and the
Federal Reserve, and the levers of money are more
powerful than the levers of armaments. Moreover, Wall
Street is better at intrigue than the CIA. The behind
the scenes fight for power is between these two powerful
interest groups. America’s hegemony over the world is
financial, not military. The military/security complex’s
attempt to catch up is endangering the dollar and US
financial hegemony.’
Roberts explained that the security establishment has
been trying to catch up with the power of the lords of
finance by launching wars to enrich themselves and to
gain more power in the society:
‘The country has been at war for a decade, running up
enormous bills that have enriched the military/security
complex. Wall Street’s profits ran even higher. However,
by achieving what economist Michael Hudson calls the
‘Financialization of the economy,’ the financial sector
over-reached. The enormous sums represented by financial
instruments are many times larger than the real economy
on which they are based. When financial claims dwarf the
size of the underlying real economy, massive instability
is present.
‘Aware of its predicament, Wall Street has sent a shot
across the bow with the S&P’s downgrade of the US credit
rating. Spending must be reined in, and the only obvious
chunk of spending that can be cut without throwing
millions of Americans into the streets is the wars.’
While notable, what this analysis by
Paul Craig Roberts fails to recognise is the rapid
integration between finance capital and the military, as
manifest by the fact that companies that profit greatly
from militarisation, such as Boeing has an established
financial arm called Boeing Capital Corporation. Most of
the big investment and derivatives firms have
established links with the private military industry.
All the top private military companies and the military
hardware manufacturers that are woven into the
military-industrial complex are traded on Wall Street.
Many of the top private military companies are
subsidiaries of Fortune 500 companies that are also
traded on Wall Street.
In fact, the
intricate web of alliance between finance capital, the
military and the corporate media/information mind
control is now so dominant that we can talk of the
finance-military-information complex, instead of the
military-industrial complex.
McGraw Hill is a poster child of the relationship
between the military, finance and information/media.
McGraw Hill is the owner of Standard and Poor’s, and
it is directly owned by some of the biggest bankers of
Wall Street.
McGraw Hill is also in the TV and media business,
with stations across the country. It owns Aviation
Week and Space Technology. The latter has
been the publication that has been the mouthpiece for
the US Air Force, and has been an advocate for high
military spending and the acquisition of expensive
military aircrafts.
As promoters of the ideology of free market and
deregulation (even in the military), the
McGraw Hill Companies is also a cheerleader for
private military corporations. These private military
corporations are involved in protecting international
capital in all parts of the world
The New York Times reported as far back as 2002 that
one such private contracting firm ‘boasts of having
“more generals per square foot than in the Pentagon.”’
As a militarist state where all is subordinated to the
needs of the financial/military interests, there is no
contradiction between the two as Roberts claims.
As international capitalists with no cut-in-stone
loyalty to the US state, the financial-military complex
is now ready to do to the US what it had been doing to
the rest of the world since 1945, intervening to
discipline governments to do the bidding of big capital.
Temporarily, these financial and military oligarchs need
to work through the US government because it is the
government that carries the authority to print dollars
as long as the dollar remains the reserve currency of
the world. This downgrade of the US credit rating is
part of the forward planning by the top capitalists to
guarantee the political and military hegemony of the
richest one per cent of the US population.
As the dollar loses
its status there will be consequences for the global
position of American capitalism. The moguls of Wall
Street want to ensure that the political leadership in
the United States is sufficiently intimidated so that as
the position of the dollar deteriorates and there are
deepening crisis for capitalism inside the US, the
government will take measures to continue to ensure that
wealth is transferred from the working peoples to the
capitalist class. Hence this downgrade is part of a long
term plan to discipline the working class and the
politicians within the United States, just as how the
IMF has been used in the past against the rest of
the world.
The Track Record and Credibility of the rating
Agencies
It is now known that
Enron
was one of the most corrupt capitalist corporations in
the US. Yet, Enron had a triple AAA rating by these
credit rating agencies until four days before the
company went bankrupt. When the full extent of the
fraudulent activities of
Enron
were revealed,
President George W. Bush claimed that this was one
‘bad apple’, implying that
Enron
was an aberration. But soon thereafter the duplicitous
dealings and accounting practices of
WorldCom
and
Global Crossing were revealed—WorldCom fudged
accounts to show inflated profits. Up to the day that
Enron sought bankruptcy protection, none of the three
rating agencies caught the fraud and corruption of
Enron.
Throughout the period of the power of the financial
houses, the blatant conflict of interest was too hard to
ignore so in the aftermath of
Enron
and
WorldCom, there has been some regulatory response.
Congress passed the
Credit Rating Agency Reform Act of 2006, ending a
century of industry self-regulation. The purpose of this
law was to promote competition in the rating industry by
establishing a transparent and rational registration
system for rating agencies seeking
NRSRO status. It was also designed to enhance
industry transparency, address conflicts of interest,
and prohibit abusive practices.
But the
Securities and Exchange Commission (SEC) was itself
impotent as the world saw from the financial crisis of
the collapse of the investment banks in 2008.
Bear
Stearns and
Lehman Brothers had enjoyed top ratings from these
agencies and the sub-prime products called
Credit Default Obligations (CDOs)
were given triple AAA ratings, even when these products
turned out to be garbage. Of course, this garbage was
held by the same bankers who own the rating agencies.
In the aftermath of the fall of
Lehman Brothers and the fact that the sub-prime
mortgage crisis exposed the securities fraud by the
financial houses, for a short time Wall Street was on
the defensive. There were dozens of lawsuits filed
against the credit rating agencies. Citizens were
calling for the fraudsters to be incarcerated but the
rating agencies went back to their old line that their
ratings are merely opinions and are protected by the
First Amendment.
It was then left to Congress to Act and after the public
outrage, the financial regulatory reform law adopted in
2010, known as
Dodd-Frank Law, directed the
SEC and other agencies to undo that link between the
‘opinions’ of the credit rating agencies and the claim
that they could regulate themselves.
The
Dodd-Frank Wall Street Reform and Consumer Protection
Act enhanced the
SEC’s enforcement mechanisms, and added a number of
requirements on
NRSROs that are immediately effective (i.e., do not
depend on SEC rulemaking). The
Dodd-Frank Act also required the commission to adopt
a number of new rules concerning conflict of interests.
According to the US government and their news sheet,
‘the
Dodd-Frank Act requires every federal agency to
review existing regulations that require the use of an
assessment of the credit-worthiness of the security or
money market instrument and any references to credit
ratings in such regulations; to modify such regulations
identified in the review to remove any reference to, or
requirement of reliance on credit ratings; and
substitute with a standard of credit worthiness as the
agency shall determine as appropriate for such
regulations.’
What this meant was that from June 2010, the
SEC unanimously approved a plan to erase
references to credit ratings from certain rulebooks. The
agency also adopted a substitute to the ratings, the
first of several such changes the commission had to
enact.
Dodd-Frank created a laundry list of new regulations
for the industry, including proposals to make it easier
for investors to sue the agencies. The
SEC must also create its own Office of Credit
Ratings to police the raters, though the agency has yet
to open its doors as it struggles to scrape together the
needed money.
Since the passing of the
Dodd-Frank Act, Wall Street has been pushing back,
spending millions of dollars to reverse
Dodd-Frank and to ensure that the law is whittled
away until it is meaningless. However, while the bankers
were seeking to protect themselves, the fact that they
were holding on to garbage since the financial crisis
was becoming clearer. This is because the depth of the
financial crisis was so much that the bail-out could
barely touch the surface of the problem. In the past
year, the vulnerability of the banks has been heightened
by the capitalist crisis in Europe. As a means of
pressuring the states of Greece, Portugal, Ireland,
Iceland and others to implement austerity measures
against workers, these rating agencies downgraded these
countries’ ratings. These downgrades exacerbated the
class struggles in Europe where the bankers and the
bond-holders wanted to be paid. For the US capitalists,
the crisis in Europe threatened the future of the Euro
and the collapse of the Euro in the short term would
serve the interests of the capitalists on Wall Street.
This would ensure that there was no clear challenge to
the dollar and the US could continue the military
occupation of many countries in Europe, especially
Germany.
However, some of these US capitalists were also exposed
by the crisis in Europe and US banks wanted to ensure
that the European Central Bank imposed austerity
measures so that the full exposure of US banks would not
be known. However, this crisis is not a simple one; it
is structural and systemic and needs fundamental changes
in how society is organised. This crisis has intensified
in the past three months with the knowledge that states
and societies such as Italy and Spain will also need the
iron hand of international capital to impose harder
burdens on the workers to transfer wealth from the
majority to a minority. French banks are loaded up with
the debts of Italy and Greece, and American banks are
holding positions in these same French banks. Hence, US
banks are not immune to the crisis in the Euro zone.
Psychological Barrier
There are some who have stated that the downgrade is
cosmetic because the other two rating agencies,
Moody’s
and
Fitch, have retained the AAA rating of the USA. This
may seem to be the case but those who have been
following the troubles of the banks and the fake stress
tests know better. The timing of the announcement of the
downgrade has some significance in the sense that it
followed the false debate and conclusion of the debt
deal.
By coming out after hours on Friday night when they knew
the state of the markets, the downgrade also provided a
false ‘public’ cover for the well-publicised subsequent
fall and rise in global stock markets. Political
spinners were able to point to the downgrade as the
‘spark’ for the drop in stock prices (particularly for
the banks). In reality, the true causes are the growing
risk and troubles in Europe, the continued lack of
growth in the US, and the fact that in spite of all the
trillions in bailouts of the banks, accounting rule
changes, and the fake stress test exams to show that the
banks are doing well, the market participants who
understand the true status of the banks revealed that
the banks are still in danger of collapsing.
Millions of persons around the world are paying
attention and there are already signs that these foreign
forces are losing confidence in the safety of US
securities by the rise in the price of gold. The other
point is that the political alliance that paved the way
for this conjuncture is being strengthened by the power
brokers in the
Treasury/Wall Street/IMF relationship. It
is this alliance that will work for the transfer of
wealth to the top one per cent and will not countenance
increased revenues from this small class.
As we have argued before, ultimately the question is not
simply one of revenues and taxing the rich, but a
fundamental restructuring of the system. However, in the
short run, the call for more taxation and regulation of
off shore accounts serve to expose the ways in which the
capitalist class is above the law. Yet these capitalists
have to live somewhere and they do not want to live in
the offshore sites of money laundering and lawlessness.
Hence, they need laws to suppress workers, take away
collective bargaining, and the safety nets of social
democracy.
The downgrade will raise the cost of borrowing; this in
turn could trickle down to higher interest rates for
local governments and individuals. The iterations of
decline and deficits will increase the government debt
and the deficit, and S&P has issued the clear threat
that another downgrade will be coming after 18 months,
if Congress does not follow its advice to impose
austerity measures.
The Chickens Coming Home to Roost
US government officials are calling the methodology of
the rating agencies flawed and some are calling for
nationalisation of the agencies and/or the establishment
of an international rating agency under the United
Nations. There was no such call when the same agencies
were working with the
IMF to impose hardships on the
rest of the world. Now, we are told that the rating
agencies cannot do math. But the destructive structural
adjustment math that the
IMF-rating agencies alliance
have used to destroy economies and livelihoods in the
global South over the past 30 years were never
questioned by those now calling out the S&P for its US$2
trillion error in its computation used to justify the US
downgrade. The complaint was that a treasury official
had spotted a US$2 trillion mistake in the agency's
analysis. Whether it was a mistake or not, a
psychological barrier has been breached. The US is no
longer beyond the sanction of agencies that it unleashed
against other societies.
Since the fall of Lehman Brothers in September 2008,
politicians have sought to cushion the blows to capital
by making band-aid remedies. For some, the issue was one
of regulation and more control over the financial
institutions. There were hearings in the US Congress and
the
Dodd-Frank law came into being. Through the media,
the financiers went on the offensive about a recovery,
but there has been no recovery because there was no
fundamental alteration in the way capitalist ensured
that wealth was transferred from the poor to the rich.
More, importantly the limits of US military power has
been put on full display in Iraq and Afghanistan. The
center of the world economy shifted to Asia while the
USA and Europe were fighting in the Middle East. The ten
biggest economies in Asia ring-fenced themselves against
the USA and the instability of the dollar. This
downgrade will reinforce this need for protection
against the dollar. From China there was the warning
that:
|
International supervision
over the issue of US dollars should be
introduced and a new, stable and secured
global reserve currency may also be an
option to avert a catastrophe caused by any
single country. |
This call for international supervision did not include
any statement on the conditions of working peoples who
are suffering at present. Inside the USA, the political
choices have been sharpened. It is either the
articulation of democratic control by the people or
oligarchic control by the banks and financial houses.
The downgrade was not a challenge to the government but
to the working peoples of the USA and the world.
Youths in the streets of Greece, London, and Cairo are
giving one response. The challenge is to coordinate
these responses for a prolonged and sustained struggle
to break the power of the financial-military-information
complex. Those who have been following the gyrations of
the capitalist debacle since 2007 will note that the
events associated with the 2011 downgrade are simply
precursors to what will continue to happen as the last
20 years of debt-driven growth in advanced capitalist
nations unwinds. In the midst of this protracted crisis
the rich will seek to transfer wealth from the poor as
the only means of sustaining their accumulation of
wealth as year 4 unfolds of what is likely to be a 7-10
year recession/depression.
The
financial-military-information complex will continue to
ensure that austerity to manage government debt falls on
the backs of working people. Corporations will continue
to claim that the only way they will invest some of
their trillions in cash to create jobs and lower
unemployment is to reduce regulations, lower corporate
tax rates and perhaps even lower minimum wages. The
American people must realise that the chickens have just
come home to roost. The people must organise more and
more to link up with working people’s struggles around
the world to break up the banks,
IMF-rating agencies
alliance and their military enterprise. Financial
institutions should be made to serve the people, not
vice-versa.
Horace
Campbell is professor of African-American
studies and political science at Syracuse University. He
is the author of
Barack Obama and 21st Century Politics: A
Revolutionary Moment in the USA. See
www.horacecampbell.net.
Source:
Pambazuka Issue 544
posted 13 August 2011
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America Needs To
Accept The Painful Fact That The Good Old Days Are Over—China's
official comment on the
S&P downgrade was harsh and condescending. Released
through Xinhua (via
Reuters) the statement condemned America for its
"debt addiction" and "short-sighted" political
wrangling. "The U.S. government has to come to terms
with the painful fact that the good old days when it
could just borrow its way out of messes of its own
making are finally gone," Xinhua wrote.—BusinessInsider
* * *
* *
Stopping the
UK’s Looters—by Alex Free—8 August 2011—What
of the politicians content to help themselves to
the public purse, bailed-out bankers with enormous,
seemingly unrestrained bonuses and corporate tax evaders
(who are also frequently complicit in entrenched
resource- and land-grabbing within Africa and the global
South)? Why employ a different vocabulary to describe
these figures to that used for out-of-control youths
raiding a local shop? Where one group of looters is seen
to be a deplorable, mindless, violent underclass
(apparently only paid attention to when rioting rather
than peacefully protesting),[1] others prove able to
behave with virtual impunity on an infinitely greater
scale, albeit without the tangible mess (with the
violence involved administered more subtly). This is not
to deny or underplay the major significance of what the
UK’s cities are currently experiencing, but rather to
ask why we see such a sharp distinction between the
response to these scenes and what we might term as
‘legalised looting’.
What could these
examples of ‘legalised looting’ be? If we try to
re-appropriate the definition of looting, we could for
example point to multinational tax avoidance (by
companies such as
Vodafone and Barclays), governments’ willingness to
deregulate and subsequently bail out the global banking
system (yielding enormous profits for those originally
responsible and precipitating widespread austerity
measures and public-spending cuts) and
British MPs’ enthusiasm for claiming wildly excessive
expenses. Harnessing the opportunities presented by
the rise of tax havens and the offshore economy,
Vodafone for example escaped paying
an estimated UK£6 billion in tax, while Barclays is
allegedly able to dodge
around UK£1 billion a year.
Tax evasion is a
practice that occurs on a far grander scale within
African countries as part of the broader problem of
licit and illicit capital flight through tax dodging,
under-reported profits and corruption—in essence, an
element of the global South’s subsidising of the North.
For example, Léonce Ndikumana and James Boyce have
estimated the capital flight from 40 sub-Saharan African
countries over the period 1970–2004 to be some US$420
billion (in 2004 dollars).[2] As a broader backdrop to
the story of looting writ large, we could also underline
the hegemony of neoliberal policy worldwide over the
past 30 years or so, a policy that has underpinned
increasingly more acute social and economic disparities
and further facilitated the concentration of wealth and
power within an ever smaller number of hands.
Further historical and contemporary examples of
under-acknowledged looting are provided by the practice
of resource-grabbing and the story of much of the
Western world’s activities in Africa and the global
South at large (whether it be oil, arable land or even
people)—activities that go back at least as far as the
advent of the transatlantic slave trade. If those
rioting in the UK are to be condemned, the same
standards should be applied to those happy to
‘outsource’ their violence and environmental
degradation— from Shell’s murderous collusion with
Nigeria’s authorities in the Niger Delta and the
controversy around labour conditions within the
Firestone company in Liberia to the activities of the US
AFRICOM (Africa Command) programme and the intervention
in Libya.
Indeed, if we look at the UK’s current contribution to
NATO’s (North Atlantic Treaty Organisation) invasion of
a sovereign African country (whose leader has fallen out
of their favour), how is it that there is money for
self-interested war-mongering and an illegal occupation
aimed at resource extrapolation[2] yet none to develop
the kind of community-regeneration initiatives that
would have gone a long way towards preventing the events
seen in the UK’s cities over the past week? Is this
violence an unfortunate spin-off of dominant free market
economic policy? Why is there not far greater emphasis
on NATO’s
killing of innocent civilians in Libya (and
elsewhere in Iraq and Afghanistan)? And might Gaddafi
look to recognise the UK’s own brand of rebels as the
country’s new legitimate and official government?
Which looting is greater, more systematised, more
problematic, senseless, violent and destructive? Could
we say that one looting is ultimately a symptom of
another? And what are we to make of the hypocrisy behind
David Cameron’s own past form as a thug and gang member
who would
smash up private property with the infamous Oxford
Bullingdon Club?
Stopping Looters
As a means of addressing socio-economic deprivation (and
even cultural marginalisation), a holistic anti-looting
policy would entail going after the practice in its most
‘high-brow’ form. Taking inspiration from
certain existing ideas—albeit suggested in relation
to street looters—and in a bid to move away from big
business greed and towards social need, maybe we could
turn things on their head and employ some of the
proposed measures to contain those doing the most
damage:
—a curfew: countries’ leaders, multinational CEOs,
bankers, corporate tax lawyers and dubious MPs alike
would be restricted in their movements
—phone data and
personal details taken: with ordinary citizens fearing
being monitored prior to actually committing a crime,
figures of power should be the first to be under
surveillance to ensure they do nothing underhand or
larcenous
—the army:
increased defence spending and militarisation are part
of the problem, so in fact it’s probably best to leave
the army out of it
—water cannon: to
be used when all else fails.
Less flippantly, when it comes to those looting on the
streets of the UK, the country needs to focus on the
actual social conditions behind why we are seeing
rioting. Likewise, we need to dare to imagine
alternatives and work towards clamping down on more
high-brow forms of looting and the system which fosters
it. In a context in which the riots are themselves a
product of increased unemployment, dispossession,
imprisonment and police harassment, calls for more of
the same policy and reaction will simply produce more of
the same conditions.—Pambazuka
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* *
For black
Britons this is not the 80s revisited. It's worse—In
1985 there was not a single black MP. The main community
voice came from
Bernie Grant, then leader of Haringey council. Grant
became a media hate figure in the aftermath of the
Tottenham riot in which an officer had been killed, when
he quoted youngsters gloating that the police had had "a
bloody good hiding". However, his connection with local
people made him hugely popular and two years later he
was elected MP. Similarly,
Paul
Boateng, who had been a campaigning civil rights
lawyer, greeted his own election the same night by
declaring: "Today Brent South, tomorrow Soweto."
 |
Today we have a dozen
black MPs, including some in the
Conservative party, but their backgrounds
are a million miles from the community
activism of their predecessors. Today's
crop, well groomed in spin, ensure they
remain on message. "I'm not a black MP, just
an MP who happens to be black," is their
common refrain. Aside from
Diane Abbott (also of the class of 87),
can anyone imagine them speaking with the
passion of a
Grant or
Boateng? In the late 80s there were
black leaders in three London boroughs. Now
there are none. So who, today, speaks for
black people?
In 1993 the
Commission for Racial Equality,
Britain's most powerful anti-discrimination
body, gained its first black chairman and
was seen as a strong advocate for equal
rights. In 2007, under New Labour, it was
abolished, and subsumed within the
Equality and Human Rights Commission,
with much-depleted funds.
photo left:
Diane Abbott |
In 1982, the first
black British newspaper, the
Voice, was set up, as the mainstream media
showed little interest in the black perspective.
Initially it thrived, buoyed by the revenue from public
sector equal-opportunities job adverts. Other black
newspapers followed—including my own. But one by
one they went out of business. The
Voice still survives, but as a shadow of its
former self, the equality ads having dried up long ago.
In 1999, the Macpherson
inquiry into the
murder of Stephen Lawrence recognised institutional
racism within the police. This led to a sudden interest
in diversity and equality in mainstream institutions. On
9/11, though, attention suddenly switched to the Muslim
"problem", and black equality was forgotten.
So the problems
have festered on, only gaining attention during mini
epidemics of gun or knife crime. This week, copycat
looting has again shifted attention from the core
problems within black communities: poverty,
discrimination, disaffection, police harassment,
educational underachievement, family breakdown. Some of
these are for individuals and communities to address;
some require support and a change of mindset by the
state.
Over the last three
decades we've allowed ourselves to be fooled that, with
greater integration, plus a few black faces in sport and
entertainment, things have improved. People gush about
the growing mixed-race population, supposedly Britain's
"beautiful" future. Well,
Mark Duggan had a white parent but it didn't make
much difference to his prospects.
Today,
[David] Cameron could stick to his comfort zone,
talking of tough action against gangs and social media,
of punishing offenders and welfare spongers. This is
destined to fail: as in Iran or Syria, a crackdown won't
solve the problem. It will just bring more people into
conflict with the law, seeing officers as the enemy.
Once that happens, the impact on communities can be
devastating.
So no, this is not
1981. In many ways it's worse. Those riots were in their
own way aspirational—people thought things could get
better. This time all the indicators seem to be pointing
downwards.—Guardian
* * *
* *
UK Systemically Racist , Policing & Lack of Opportunity
/
London riots: BBC apologises for accusing Darcus Howe
Eye Witness Account—Tottenham Riots /
London Riots /
Linton Kwesi Johnson—Inglan Is A Bitch
London Insurrection—Now Why Does This sound So Damn
Familiar? /
England riots: 'The whites have become black' says David
Starkey
* * *
* *
"Her Majesty's
Democracy": Britain's Parliament demands Violent
Repression of Youth Riots—by Julie Hyland—12 August 2011—In
his opening statement, Prime Minister
David Cameron rejected that the disturbances were in
any way connected to the police killing of 29-year old
Mark Duggan last Thursday in Tottenham. Duggan’s
death was “used as an excuse by opportunist thugs in
gangs”, he claimed, to carry out “criminality”.
It is now known
that Duggan was shot and killed in a pre-planned
operation, and that police claims they had opened fire
in self-defence are lies. His death was only the latest
in the toll of some 340 fatalities that have occurred in
police custody over the last decade or so, for which not
a single police officer has been convicted.
Cameron is
indifferent to police lawlessness, however. The purpose
of his statement was to insist that the disturbances
were solely the result of “criminality” and “immorality”
amongst young people, who must be dealt with ruthlessly.
The riots had shown that “pockets of society” were
“frankly sick”, the prime minister said, marked by
“mindless selfishness”, and a “complete lack of
responsibility.” Not only is this a slander against
working class youth. Such statements more properly apply
to the prime minister himself.
After all, it is
less than one month since this smug, multi-millionaire
old Etonian was implicated in the lawless activities of
Rupert Murdoch’s News of the World, which included
phone hacking and the bribery and corruption of police
officers. For years, the political establishment had
kept quiet about News International’s “criminality on an
industrial scale”—all eager to please the
multi-billionaire, arch reactionary media baron lest he
reveal the dirt he had on them. Even now Murdoch, his
CEOs and the corrupt police officers involved have
escaped prosecution. . . .
A range of punitive
social “sanctions” are to be enforced against anyone
involved in the disturbances—including evicting them
from council housing, and stripping them of welfare
benefits. Curfews, the interception of electronic
communications and “anti-gang” measures are also on the
table. . . .
The Labour Party is
a corrupt, right-wing, big-business party. The various
so-called “lefts” and “liberals”—indifferent to social
deprivation and horrified at the spectre of social
unrest lest it impinge on their privileged lifestyles
and bulging stock portfolios—are no different. The
Labour MP
Diane Abbott was just one of those who
gave her full support to the police clampdown. Abbot
made her political career on the backs of the inner-city
riots in the 1980s, exploiting the legitimate concerns
of black workers and youth at police brutality. It was
the failure of the police to intervene early enough in
the current disturbances that gave the green light to
“every little hooligan in London” to go out and loot,
she said.
The rottenness and
corruption of Labour, the “left” and the trade unions is
entirely responsible for the fact that the legitimate
grievances of young people have taken the form of an
explosion of rage and violence. These organisations have
either become open advocates of big business, in the
case of Labour, or experts at directing workers’
struggles into the dead end of an orientation to the
Labour Party. Walled off from any role in political
life, working class youth have been unable to fight
their deepening social oppression, until their anger
exploded in response to recent acts of police brutality.
The riots are in the final analysis the reflection of
the government’s corruption and utter imperviousness to
the basic needs of the working class.—GlobalResearch
* * *
* *
 |
There is a need for Jobs, Jobs and
more Jobs!
We need JOB Training, JOB
Creation and JOB Placement programs—a Stimulus II.
I
advise President Obama to collect the one Trillion
Dollars and any interest back as soon as possible
from those recipients who owe before 1 mega bonus is
given out. . . .
I advise President Obama to
implement Stimulus II and claim his spot in history
stimulating the recovery of the US Economy and
relieve the heavy economic pressure on the Obama
supporters in many cases who are the most in need of
a hand up in this time of suffering by the lower
levels of American Society. Nation building like
charity begins locally—at home. Stimulus II could
help turn things around and be the difference in
second term prospects and winning in 2010 by
mobilizing the base! Momentum for Stimulus II could
also receive a boost and be the next priority or
second step to winning the health care overhaul
legislation with a robust public option! If not $400
Billion or $1 trillion President Obama then propose
some significant figure and go to work on it!—
Larry
Johnson-Redd
ljredd52@aol.com
With 16 Million Jobless, Should the Feds Pay People
to Work? |
* * *
* *
|
Freefall: Free Markets and the Sinking of
the Global Economy
By
Joseph E. Stiglitz
The Great Recession, as it has come to be
called, has impacted more people worldwide
than any crisis since the Great Depression.
Flawed government policy and unscrupulous
personal and corporate behavior in the
United States created the current financial
meltdown, which was exported across the
globe with devastating consequences. The
crisis has sparked an essential debate about
America’s economic missteps, the soundness
of this country’s economy, and even the
appropriate shape of a capitalist system.
Few are more qualified to comment during
this turbulent time than Joseph E. Stiglitz.
Winner of the 2001 Nobel Prize in Economics,
Stiglitz is “an insanely great economist, in
ways you can’t really appreciate unless
you’re deep into the field” (Paul
Krugman, New York Times).
The Ideological Crisis of Western Capitalism |
 |
* * *
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|
Barack Obama and 21st Century
Politics
A Revolutionary Moment in the USA
By Horace Campbell
Campbell's book is a bracing reminder of all
the threads of history woven into this
extraordinary moment, a warning about the
military and financial forces trying to keep
things as they are, and an inspiration to
work for the very different world that could
be within our grasp.—Adam
Hochschild, writer and journalist,
co-founder of Mother Jones magazine and
author of King Leopold's Ghost
(2006)
Scholar-activist Horace Campbell has given
us a provocative new perspective on the
United States' first Black president. The
book is a 'must read' for those interested
in Black American and American politics and
the shifting global realities of the 21st
century. It is sure to spark animated
debate.—Barbara
Ransby, Associate Professor of African
American Studies and History, University of
Illinois-Chicago
"Horace
Campbell probes the campaign of Barack Obama
and finds a revolutionary potential vested
in the use of new strategies and in its
agenda for progressive social, economic and
political change that would be historic if
successfully affected in governance and
accepted by a society truly ready for
change.—Ronald
W. Walters, |
 |
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* * *
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The Persistence of the Color
Line
Racial Politics and the Obama Presidency
By
Randall Kennedy
Mr.
Kennedy, a Harvard Law School professor,
sets what we know of Mr. Obama’s presidency
thus far in relief against the sorry history
of racial politics in the United States. He
worries, even in 2011, about “an inflated
sense of accomplishment” in regard to racial
progress. He points out that, in all of its
history, America has elected only three
black senators and two black governors. Mr.
Kennedy examines recent racial flare-ups—
over criticisms of America by the
Rev. Jeremiah A. Wright Jr., Mr. Obama’s
former pastor; over Sonia Sotomayor’s
Supreme Court confirmation; over Mr. Obama’s
remarks when the Harvard professor Henry
Louis Gates Jr.
was arrested by a white police officer
after forcing open his own front door—and
declares, using what is, I think, his book’s
sole exclamation point: “Race still
matters!” His book is also, crucially, a
running and sometimes acid commentary on Mr.
Obama and what Mr. Kennedy refers to as “the
Obama enigma.” How progressive, deep down,
is this man? Does he have the audacity, to
borrow one of Mr. Obama’s favorite words, to
lead?—NYTimes |
* * *
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The Conscience of a Liberal : Reclaiming
America from the Right
By Paul Krugman
Economist and
New York Times columnist Krugman's
stimulating manifesto aims to galvanize
today's progressives the way Barry
Goldwater's
The Conscience of a Conservative
did right-wingers in 1964. Krugman's
great theme is economic equality and the
liberal politics that support it.
America's post-war middle-class society
was not the automatic product of a
free-market economy, he writes, but was
created . . . by the policies of the
Roosevelt Administration. By
strengthening labor unions and taxing
the rich to fund redistributive programs
like Social Security and Medicare, the
New Deal consensus narrowed the income
gap, lifted the working class out of
poverty and made the economy boom.
Things went awry, Krugman contends, with
the Republican Party's takeover by
movement conservatism, practicing a
politics of deception [and] distraction
to advance the interests of the wealthy.
Conservative initiatives to cut taxes
for the rich, dismantle social programs
and demolish unions, he argues, have led
to sharply rising inequality, with the
incomes of the wealthiest soaring while
those of most workers stagnate.
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